Why New Chrome OS Won't Turn Google Into a Monopoly: Analysis

As Google announces its intention to create a full Web-based operating system, senior technology editor Glenn Derene has a flashback to the late '90swhen the Justice Department brought an antitrust action against Microsoft. Could Google's new browser-as-operating system kill competition?

In 1998, the U.S. Department of Justice (DOJ) brought an antitrust action against Microsoft for a variety of anti-competitive practices in the software industry--chief among them the bundling of the company's Internet Explorer browser into its dominant Windows operating system. The trial revealed plenty of bare-knuckled tactics and market manipulation on behalf of Microsoft, and stained the company's brand for years (perhaps forever, frankly) as a corporate bully. But the central argument from Microsoft was that, with the ascent of the Internet, the browser had become an integral part of the OS, and that competing stand-alone browsers such as Netscape and Opera were moribund products from a transition era. Microsoft contended that it needed to evolve the OS to adapt to the Internet-based era just to stay competitive as a company--a claim that seemed ludicrous back in the '90s, when the software giant seemed to have indomitable market power.

What a difference a decade makes. Just last night, Google officially announced its intention to create a full Web-based operating system. The OS will be designed to run on netbooks with either x86 or ARM processors and will be built on the back of Google's Chrome Web browser. The echoes of the 90s are abundant. The DOJ now has Google in its sights as a potential monopolist in the Web search and advertising world, and for its part, the search giant is crying about its vulnerability as a company, claiming that competition "is just one click away." And in an effort to bring truth to that statement, Microsoft is busy selling its new search engine, Bing, through a concerted marketing push. Meanwhile, Apple's OS X (both desktop and iPhone flavors) are ascendant, Linux has gained considerable traction through user-friendly builds such as Ubuntu and the browser world is in full flower with excellent offerings from Mozilla, Opera, Apple, Google and Microsoft. Competition has never seemed so abundant.

And it strikes me that, back in the 1990s, Microsoft was right and the Justice Department was wrong. As Google's upcoming cloud-based OS shows, not only is the browser integral to an Internet-age OS, it has potential to be the backbone of the OS. If Microsoft had truly been forced to divorce Internet Explorer from its operating system and sell it as a separate product, Windows would be almost completely irrelevant by now, and it would be impossible for Microsoft to compete with Google. (Ironically, by making Microsoft more cautious, it can be argued that the DOJ has contributed to the rise of its current monopolist of the moment.) Will Google's OS pose a true threat to the next-gen Windows 7 and Apple's Snow Leopard? It's hard to say--things evolve swiftly in the tech world, but not instantly. It may be the case that an increasingly tech-savvy populace will be comfortable using multiple operating systems for different applications and hardware (that is already the case for Windows users who have iPhones). The fundamental question will be how all of these different operating systems work together. Can a Chrome OS play nicely with Bing search? Will Apple ever allow Snow Leopard to be installed on non-Apple products? Will Microsoft's Internet Explorer continue to run Google Apps? In a world of multiple, thriving operating systems, customer frustration may prove Google's current "we're not a monopolist" argument is just as prescient as Microsoft's "the browser is the OS" argument was in the '90s--and competition is just a click away.